Affordable ER offer but EE gets subsidy?

[Flyboyjohn]

Are there circumstances where the ER offers affordable, minimum value coverage but the EE can still qualify for a Marketplace subsidy (premium tax credit?

Stated differently, is the definition of what's affordable for purposes of the employer mandate exactly the same as the definition used for purposes of PTC qualification?

We've encountered situations where subsidies have been awarded despite our submission of proof that the employee declined an offer of coverage that met an affordability safe harbor.

[ERISAAPPLE]

6 hours ago, Flyboyjohn said:

Are there circumstances where the ER offers affordable, minimum value coverage but the EE can still qualify for a Marketplace subsidy (premium tax credit?

Stated differently, is the definition of what's affordable for purposes of the employer mandate exactly the same as the definition used for purposes of PTC qualification?

We've encountered situations where subsidies have been awarded despite our submission of proof that the employee declined an offer of coverage that met an affordability safe harbor.

Employers can use a safe harbor for the employer mandate that is not necessarily the same as the employee's actual household income.  I would think that in most cases the employee's household income should be higher unless the employer is somehow (and wrongly) gaming the system with the rate of pay safe harbor.  I can't see how it would be lower.  A higher income would result in the cost being a lower percentage of income.  So I don't know what to tell you man.  Maybe the employee fudged the numbers with the Exchange.  

[leevena]

Could this be a situation where the employee was given the subsidy wrongly?

[Ryan Moulder]

This can theoretically happen and apparently it is happening more often than you think. I had several clients contact me regarding the HHS appeal last summer.  The situation was typically the employer offered an employee coverage but despite offering "affordable" minimum value coverage the employer received a section 1411 notice in the mail from CMS.  In the end this was not a huge issue for the employer as described in this article - https://accord-aca.com/articles/losing-an-hhs-appeal-are-there-any-losers.  I am pretty confident the Exchanges are just having trouble determining who is and who is not eligible for a premium tax credit as there is not a great safe guard for individuals lying (or just not understanding the term "affordable" as used in the ACA) to the Exchange.  Hopefully, this is correct for future filing years but we will have to wait to see.

While I don't think it would be possible to do on a large scale this article from 2013 discussed the possibility of an employer offering "affordable" coverage while still allowing all of its employees to be eligible for a premium tax credit - http://moulderlaw.com/can-employers-create-a-goldilocks-zone/.  This article may be helpful in describing scenarios for your specific question.

If you feel your scenario is different than the ones described, I'd be happy to chat rmoulder@healthcare-attorneys.com.  I am always interested to hear about scenarios people are seeing.